CHICAGO, January 3, 2013 – After three consecutive months of
increased layoff activity, the number of planned job cuts
announced in December plunged to 32,556, the second lowest
monthly total of 2012. Overall, the year ends with the lowest
12-month job-cut total since 1997, according to the latest report
from global outplacement consultancy Challenger, Gray &
Christmas, Inc.

The 32,556 planned job cuts announced last month were 43 percent
fewer than the 57,081 November cuts. The December total was 22
percent lower than a year ago, when employers announced 41,785 in
the final month of the year. The only month in 2012 to see fewer
job cuts than December was August, when job cuts totaled 32,239.

Despite the December decline, planned layoffs in the fourth
quarter were up 33 percent from the previous quarter. Employers
announced 137,361 job cuts in the final three months of year,
compared to 102,910 in the third quarter. The third-quarter total
was the lowest quarterly total since 81,568 job cuts were
announced in the second quarter of 2000.

Due in large part to the slow pace of downsizing in the third
quarter, annual job cuts totaled 523,362, which is the lowest
year-end total since 1997, when employers announced 434,350 job
cuts during the year. The 2012 total was 14 percent lower than
the 606,082 job cuts announced in 2011.

“We saw a few spikes in monthly job cuts in 2012 and there were
some significant mass layoffs that definitely reminded us that
not every industry is enjoying the fruits of recovery. However,
the overall pace of downsizing was at its slowest since the end
of the recession. In fact, we have not seen this level of job
cutting since before the dot.com collapse and subsequent 2001
recession,” said John A. Challenger, chief executive officer of
Challenger, Gray & Christmas.

One of these significant mass layoffs occurred in December, when
banking giant Citigroup announced 11,000 job cuts early in the
month. The Citigroup announcement accounted for the majority of
the 11,355 job cuts announced last month in the financial sector,
which was the top job-cutting sector in December. The
transportation sector was a distant second with 4,844 job cuts.

The leading job-cut sector for the year was the computer
industry, with a total of 46,164 announced layoffs since January.
That marks a 215 percent increase from 2011, when these firms
announced 14,677 job cuts. It is worth noting that nearly 60
percent of the computer cuts in 2012 were the result of the May
job-cut announcement from Hewlett-Packard impacting 27,000
workers.

The transportation sector, which was the second leading job-cut
sector in December, was also the second largest job cutter for
the year. The 42,107 job cuts announced by these firms in 2012
were up 189 percent from 14,584 planned cuts in 2011.

While a handful of industries experienced increased downsizing in
2012, several sectors, including construction, retail, financial
services, and aerospace and defense saw decreased job-cut
activity. Perhaps the most dramatic decline occurred in the
government sector, where job cuts plunged 90 percent from an
industry-leading 183,064 in 2011 to just 19,128 in 2012.

“The fact that the top job-cutting industry in 2011 shed nearly
190,000 workers while the top job cutter this year did not even
crack 50,000 reveals a lot about where we are in this recovery.
Despite the uncertainty related to the fiscal cliff, which has
now been averted thanks to a last-minute deal, employers held
steady in the final months of the year and avoided a surge in
mass layoffs,” said Challenger.

“Of course, we are hardly out of the woods. The deal struck on
Tuesday will do little to impact the nation’s soaring debt and
new battles over the debt limit and broader government spending
cuts still lie ahead. As a result, the country’s employers may
still lack the confidence to move forward with more aggressive
hiring plans in 2013,” he added.

According to the latest available data from the Bureau of Labor
Statistics, private-sector payrolls achieved net gains averaging
154,000 new workers each month through November 2012. Overall,
private-sector employment increased by 1,697,000 new workers from
January through November. That remains well off the pre-recession
peak, which in 2005, saw private-sector payrolls increase by an
average of 193,000 new workers per month for an annual total of
2,312,000 new jobs.

“Friday’s report on December employment could show a hiring boost
from construction and other new jobs related to post-hurricane
clean-up efforts on the East Coast. Late holiday season hiring
may also show up in retail employment numbers. However, with one
report indicating that holiday retail sales were weaker than
expected, we could see a purging of retail workers in future
employment reports,” said Challenger.

“This seasonal house-cleaning in the retail sector is unlikely to
show up in our job-cut tracking, since most of the jobs were
temporary in nature and the cuts go unannounced. However, we
could see plenty of early-year job cuts announced in other
sectors. Historically, January is, on average, the biggest
job-cut month of the year, and several sectors, including
computer, financial services, consumer products, transportation
and aerospace and defense are at risk due to a high potential for
reduced spending by consumers, businesses and government in
2013,” Challenger noted.

In 20 full years of tracking since 1993, January has been the top
job-cut month of the year nine times. The next closest month is
December, which has been the top job-cut month just three times.
Since 1993, job cuts have averaged 101,084 in January. The second
largest monthly average over the same period is 80,321 job cuts
in October.